Government raised price of fertiliser to Rs1,850 per bag

KARACHI: On Tuesday, the government and fertiliser firms reached an agreement to set the price of a 50kg bag of fertiliser at Rs1,850.

The Ministry of Industries and fertiliser companies have reached an agreement, according to a statement.

The government had previously set the price of urea at Rs1,768 a bag, but fertiliser producers refused to sell it and requested refunds. The businesses had expressed their displeasure with the government’s price.

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“The government and fertiliser firms have agreed at a price of Rs1,850 per bag,” it said. “Before, urea bag was being sold for Rs2,033.”

Last week, the government fixed the fertiliser price at Rs1,768 a bag, which irritated producers, according to Saqib Hussain, a senior equities research analyst at Akseer Research.

“The producers were selling fertiliser at Rs2,033 per bag and hence, a price of Rs1,768 meant that they were selling at a loss of Rs265 per bag,” he said. “This week, government officials met with representatives of fertiliser firms and both sides unanimously agreed to fix urea price at Rs1,850 per bag.”

He went on to say that the new pricing has a negative impact on fertiliser companies since they will continue to sell at a loss, but it is somewhat less than when the price was fixed at Rs1,768 per bag.

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When it came to farmers, he noted that the change was beneficial because their prices had fallen. He was unsure whether the decline in farmer prices would have an effect on food prices after six months.

“Urea manufacturers decrease prices as per government orders but dealers keep their margins stagnant,” he said. “When urea became scarce in the recent past, dealer sold one bag in the range of Rs2,800-3,000.”

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